AO Smith at New 52-Week High - Analyst Blog


Shares of AO Smith Corp. ( AOS ) reached a new 52-week high of $55.18 during its trading session on Nov 26. This denotes an increase over the previous high of $54.77 reached on Nov 15.  

AO Smith closed the trading day on Nov 26 at $54.88, reflecting a solid year-to-date return of 71.8%. The trading volume for the session was 0.42 million shares. Further upside potential exists for this Zacks Rank #1 (Strong Buy) industrial electrical equipment maker, as can be deduced from its projected earnings growth rate of 26.0% for the next five years and 34.9% for the year 2013.

Growth Drivers

AO Smith reported impressive financial results for the third quarter of 2013. Adjusted earnings per share came in at 54 cents, up 45.9% over the year-ago quarter and roughly 22.7% above the Zacks Consensus Estimate of 44 cents. Shares have risen by 9.3% since the earnings release on Oct 21.

Revenue increased by 16.0% year over year on the back of 10.2% increase in revenue generated from North America and 30.9% from the Rest of World segments. Residential and commercial water heaters and commercial boilers sold in North America increased while product sales in China and demand for premium water heating and water treatment products were strong in the quarter.

For 2013, management of AO Smith anticipates adjusted earnings per share to be within the $2.00-$2.04 range versus $1.84-$1.90 expected earlier.

Also, AO Smith had positive earnings surprises in all the trailing four quarters, with the average being 20.6%.

Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for AO Smith has increased by 5.7% to $2.04 for 2013 and by 6.0% to $2.29 for 2014. This represents year-over-year growth of 34.9% for 2013 and 11.8% for 2014.

AO Smith currently has a market capitalization of $5.0 billion and carries a Zacks Rank #1 (Strong Buy). Some other stocks worth considering in the industrial electrical equipment industry include EnerSys ( ENS ), Rexnord Corporation ( RXN ) and JinkoSolar Holding Co., Ltd. ( JKS ). While EnerSys also holds a Zacks Rank #1 (Strong Buy), Rexnord and JinkoSolar carry a Zacks Rank #2 (Buy).

SMITH (AO) CORP (AOS): Free Stock Analysis Report

ENERSYS INC (ENS): Free Stock Analysis Report

JINKOSOLAR HLDG (JKS): Free Stock Analysis Report

REXNORD CORP (RXN): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: AOS , ENS , JKS , RXN

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